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Why Avis Budget Group (CAR) Is Soaring on Thursday

NEW YORK (TheStreet) -- Avis Budget Group(CAR - Get Report) is soaring after reporting a fourth quarter which beat estimates on the top- and bottom-line. Management also forecast fiscal 2014 earnings and revenue in-line with consensus.

By noon, shares had added 7.9% to $43.14.

The car rental company recorded per-share earnings of 15 cents on revenue 8.8% higher year over year to $1.85 billion. Analysts surveyed by Thomson Reuters had forecast net income of 12 cents a share on $1.83 billion in revenue.

Higher quarterly revenue was due to a 6% increase in rental days and the acquisition of Zipcar in March 2013 which contributed an additional $74 million in sales. Payless Car Rental, purchased in July 2013, added $21 million in sales to quarterly revenue.

Including one-time charges, the company reported a net loss of $28 million due to restructuring costs in Europe and the paying down of debt. The loss was narrower than a net loss of $46 million in the year-ago quarter.

Over fiscal 2013, net income of $2.20 a share exceeded consensus by 3 cents a share and revenue 8% higher to $7.94 billion was $10 million more than expected.

"Our initiatives to accelerate growth in higher-profit customer segments and channels drove both strong volume and positive pricing. We also made a number of investments that not only expanded our global footprint, but also positioned us to benefit from faster-growing markets, highlighted by our acquisition of Zipcar," said CEO Ronald L. Nelson in a statement.

For fiscal 2014, the Parsippany, NJ-based business expects revenue between $8.3 billion and $8.5 billion, a 5% to 7% year-over-year increase. Diluted earnings are forecast to rise 11% to 30% to between $2.45 and $2.85 a share.

Analysts forecast per-share earnings of $2.72 and total sales of $8.35 billion.

TheStreet Ratings team rates AVIS BUDGET GROUP INC as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate AVIS BUDGET GROUP INC (CAR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."